Amicus Curiae Brief — Parker Drilling Mgmt. Servs., Ltd. v. Newton, 139 S. Ct. 914 (2019) (No. 18-389)

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No. 18-389

In the Supreme Court of the United States

PARKER DRILLING MANAGEMENT SERVICES, LTD.,

Petitioner,

BRIAN NEWTON

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUIT

BRIEF OF FREEPORT-MCMORAN OIL & GAS LLC,

AMPLIFY ENERGY CORP., BETA OPERATING

COMPANY, LLC, DCOR, LLC, ENSIGN UNITED

STATES DRILLING (CALIFORNIA), INC., AMERICAN

PETROLEUM INSTITUTE, CALIFORNIA INDEPEND-

ENT PETROLEUM ASSOCIATION, INDEPENDENT

PETROLEUM ASSOCIATION OF AMERICA,

NATIONAL ASSOCIATION OF MANUFACTURERS,

NATIONAL OCEAN INDUSTRIES ASSOCIATION,

OFFSHORE OPERATORS COMMITTEE, and

WESTERN STATES PETROLEUM ASSOCIATION

AS AMICI CURIAE IN SUPPORT OF PETITIONER

BALDWIN J. LEE JOHN P. ELWOOD

ALLEN MATKINS LECK KEVIN A. GAYNOR

GAMBLE MALLORY & JEREMY C, MARWELL

NATSIS LLP Counsel of Record

Three Embarcadero Ctr. VINSON & ELKINS LLP

12th Floor 2200 Pennsylvania Ave.,

San Francisco, CA 94111 NW, Suite 500W

(415) 273-7446 Washington, DC 20037

(202) 639-6500

jJmarwell@velaw.com

Counsel for Amici Curiae

[Additional counsel for Amici Curiae listed at end of brief)

TABLE OF CONTENTS

A I ac teaunendiotiontnnine ii

I Oe ee te vicncasesevenesnctiacebevsszetecomesnereese 1

Introduction and Summary of Argument................ 2

PREPS EERE BE PR PERSE ee ee nt PRE NS ee ROE 5

|. Consistent with the Statutory Text and

Purpose, Every Court Except the Ninth

Circuit Has Interpreted OCSLA as

Borrowing State Law Only When Necessary

to Fill Substantial Gaps in Federal Law .......... 6

Il. The Ninth Circuit's Interpretation Gives

State Law Supremacy Over Federal Law In

An Area Under’ Exclusive’ Federal

Jurisdiction And Control .............ccccccccceeeeeeeeees 10

A. The OCS Is Subject to the Exclusive

Jurisdiction and Control of the Federal

RES eS SSW Sales Peeler ree ae 1]

8B. Congress Deliberately Rejected the

Notion that State Law Could Displace

Federal Law on the OCS .................6.0000008 15

C. The Ninth Circuit's Interpretation

Encourages Strategic Behavior by the

States to Frustrate Federal Policy........... 21

Ill. The Ninth Circuit's Interpretation Disrupts

Employment Relationships Formed In

Reliance On Settled Law..........cssssssssseseseeeeees 23

a a 34

(i)

TABLE OF AUTHORITIES

Cases: Page(s)

Abramski vy. United States,

I i ccisisennibeeeulaies 14

Aera Energy LLC vy. Salazar,

ee ee GY MIRED co cccnccnscscccebscceccscsnsces 32

Air Logistics of Alaska, Inc. v. Throop,

181 P.3d 1084 (Alaska 2008) .................cccccccecceeeees 30

Alabama vy. U.S. Dep't of Interior,

84 F.3d 410 (11th Cir. 1996)................ccccccees 14, 27

Amoco Prod. Co. v. Vill. of Gambell,

a _cepeusnsnanusnooastoeen 14

Brigham v. Eugene Water & Elec. Bd.,

857 F.3d O81 (th Cir. BOO4).........s0cceccccccreccsescescees 21

Brown vy. Allen Parish Police Jury,

526 So.2d 1190 (La. Ct. App. 1988).................4 30

Thevron Oil Co. v. Huson,

i el passim

Cont'l Oil Co. vy. London S.S. Owners’ Mut. Ins.

Ass'n, 417 F.2d 1030 (5th Cir. 1969)............. passim

Dolan v. U.S. Postal Serv.,

ET EE RE Re Re ee 14

EP Operating Ltd. P’ship v. Placid Oil Co.,

Pe FF Ve | ae 33

Genina Marine Servs., Inc. vy. Arco Oil & Gas

Co., 499 So.2d 257 (La. Ct. App. 1986)................... i)

Gulf Offshore Co. vy. Mobil Oil Corp.,

ee ee Se anccescenilibbhscesdeetadestsnsecteseness passim

Cases—Continued: Page(s)

Halferty v. Pulse Drug Co.,

864 F.2d 1185 (6th Cir. 1989) .00.........cccccceseeeeeeneee 21

Holliday v. MVM, Inc.,

No. 08-cv-7924, 2010 WL 11519452

a I i i os scimnennensncanuces 22

LeSassier vy. Chevron USA, Inc.,

776 F.2d 506 (5th Cir. 1985)................0.0006 9, 18, 20

Lewis v. United States,

I a si scnsicemndeaucebeaninns passim

Maryland vy. Louisiana,

I, aos a scetrscipcerncebile 8, 13

Mendiola v. CPS Sec, Solutions, Inc.,

ee MI, BI icon cicscicicccsccccosssoncescoosssosee 30

Mersnick v. USProtect Corp.,

No. 06-cv-3993, 2006 WL 3734396

SER Gs: HEU: GIN TENE cnnccontassccecdsroatodooscersevensens 21

Nat'l Ass'n of Mfrs. v. Dep't of Defense,

ey es I ITI cise ric ccapenndicengnosanpasouinevadens 19

Nations v. Morris,

483 F.2d 577 (5th Cir. 1973)................0000+ 10, 18, 20

Offshore Logistics, Inc. v. Tallentire,

i sssepsnnnenbe 18

Pac, Operators Offshore, LLP v. Valladolid,

RE ENE AE SE CS ET 6, 15

Paul vy. United States,

I a oc seueetesnbbenin 22

Perry v. George P. Livermore, Inc.,

165 S.W.2d 782 (Tex. Civ. App. 1942).............0006 30

Cases—Continued: Page(s)

Rodrigue v. Aetna Cas, & Sur. Co.,

I: SI inc csrcnsnccrcnsncdeceosccsssiéenoeets passim

Sec'y of the Interior v. California,

I I I arisen cncscesnguneapeenencqnnnnien 27

Shell Oil Co. v. Iowa Dep't of Revenue,

ET TAI, Se UII cn ca scctnsienmsosseceeceeseoncenscosesents passim

Sullivan v. Oracle Corp.,

ee ee I IN ED ccousivvicsesconssvessocereeeoeeevanitinn 32

Ten Taxpayer Citizens Grp. v. Cape Wind

Assocs., LLC, 373 F.3d 183 (1st Cir. 2004).............. 4

Tetra Techs., Inc. v. Cont'l Ins. Co.,

814 F.3d 733 (6th Cir, 2016)...........ccccceceseererees 9, 28

Tidewater Marine Western, Inc. vy. Bradshaw,

Be ee te es IED vevetececinccscccesesnzscecneesecsoesere 28

United Ass'n of Journeymen v. Barr,

061 F.2d 1968 (D.C. Cir. 1008) ......ccccsccsssessrrrereees 16

United States vy. Alaska,

I a os cscencenbanensiesenenneonee 13, 14

United States v. Antelope,

I io oad snapdamseensinninnnene 20

United States vy, California,

| 3, 6, 11, 12

United States v. Christie,

717 F.3d 1156 (10th Cir. 2013).............:::cccceeeeeeees 19

United States v. Darby,

a ara iceen incaseesintebobeiitibinl i)

United States vy. Louisiana,

I a ass scnteuoumnebiln’ 6, 13

Cases—Continued: Page(s)

United States vy. Louisiana,

| EARRINGS Epratepeey seer sere Perens. 1]

United States v. Maine,

ee, en. ccansoepelioeniecenieninia passim

United States v. Texas,

Fee Te eee ree 6,

Williams v. Brinderson Constructors, Inc.,

No. 15-cv-2474, 2015 WL 474789

Aes ats UI: ide, SIDI inctnebiccacindinciessetienidiabiiadiateains 28

Statutes:

BF i RD scterincisiceyencsnninsdsetstnienicdaenanntai 20

Be ls Se Oe BR consesncassersentnsvititebaveuenianmnadell 9

BD eh re GE BG ccccvintcccnecesnsecsseiortncvsinastdmabiinnl 13

Fy Se secsiesttbintnrtsescivesiiintintiitiendientnumaniidca 14

es ee Oe OE secerserrsecnsctnitintateimmnaans 3, 5

Ce CI a vocccereceiestensnieiiniicaiaitteccncaneas 14

GD EF ies Be baptvovvecencassensosesriaveansensvitaniianemeaimaanion 3

BD Pe ED vehestevicinsticcevsinweentcesnieuenineeal 3, 6, 14

GD Es SED sdaveeccustisestastoicsecinieslidammuianenmnaniaan 22

BD Fs SD ccvcscetcesssttrntesenciemeinnnnnnal passim

BU ae Be vnnververitsitescnentionemenn passim

GD Vide TIO ccccsercsvncicsrevieiccnsesnetsenseinnaine 32

OP EEE vescereesescsatecsdetuinsloteineeatictabalaaanl 82

Se ty BD cticenserscssasecivenctunsscniennntsceanincianiieal 28

Fels See decree scactcicetesveniosacnecsecetscimransaneaa 3, 22

SS Fes Be tesircrsertevhicanssinctspirauiiatisintianada 3, 22

Cal. Lab. Code §500 et seq. 27

Regulations: Page(s)

EE IRE SAE ER ROT RE 21

Nee ccmmeanabausii 32

Or. Admin. R. 839-020-0042(3) ...............cccccccceeeeeeeees 30

Other Authorities:

99 Cong. Rec. 6963 (1953) .................cecccceeceeeeees 4,7, 16

Br. for Appellee, Mesa Operating Ltd. P’ship v.

U.S. Dep't of the Interior,

No. 89-04775, 1990 WL 10084692 (5th Cir.

a subbebnoneronscoocs 29

Bureau of Ocean Energy Mgmt., Alaska OCS

Region, https://www.boem.gov/Alaska-

EE RPE ee a ee 30

Bureau of Ocean Energy Mgmt., Gul/ of Mexico

OCS Region, https://www.boem.gov/Gulf-of-

ERIE IE SERA EC 28

Bureau of Ocean Energy Mgmt., Pacific OCS

Region, https://www.boem.gov/Pacific-

Cal. Indus. Welfare Comm'n, Public Meeting

(Dec. 15, 1999),

https://www.dir.ca.gov/iwc/PublicMeeting 121

Cal. Indus. Welfare Comm'n, Public Meeting

(Nov. 15, 1999),

https://www.dir.ca.gov/iwc/PUBMTG111599.

vii

Other Authorities—Continued: Page(s)

Calash LLC, The Economic Impacts of

Allowing Access to the Eastern Gulf of Mexico

for Oil and Natural Gas Exploration and

Development (2018), https://bit.ly/2GAzRom ........ 33

Daniel S. Miller, Offshore Federalism: Evolving

Federal-State Relations in Offshore Oil &

Gas Development, 11 ECOLOGY L. Q. 401

Dr. Edward A. Fitzgerald, The Tidelands

Controversy Revisited, 19 ENVTL. L. 209

Edward A. Fitzgerald, The Seaweed Rebellion:

Federal-State/ Provincial Conflicts over

Offshore Energy Development in the United

States, Canada, and Australia, 7 CONN. J.

rats BT cintiricisisccdutametuntediibanibhbesaninsteose 11,12

Eric N. Smith, Louisiana — The Status of the

State: A Report on the Impact of Energy

Activity on the State’s Economy, GREATER

NEW ORLEANS, INC. (2014),

TO aaa 25

Executive Order 13795, 82 Fed. Reg. 20,815

ES ES SS 3, 22

Executive Order 9633, 10 Fed. Reg. 12,305

cts WN adipnsiniatsinicabtateeaiiaitbmsiccanpeianniididusenneties 11

Jessica Resnick-Ault, U.S. States Slow Trump

Offshore Oil Drilling Expansion Plan,

REUTERS (Mar. 12, 2018),

re cetcccceccccsccsseccesscsncessesscaseasee 23

Vili

Other Authorities—Continued: Page(s)

Jim Nicholson, The Incredible Economic

Opportunities of Offshore Energy

Exploration, NAT'L REVIEW (Oct. 1, 2018),

RE AT Ce 25

Keith Chu, Will Revenue Sharing Spur More

Offshore Drilling?, GLOBAL ENERGY

INSTITUTE, https://bit.ly/2GBakved ......................... 33

Outer Continental Shelf Governors Coalition,

RE: Request for Comments on the 2019 -

2024 Draft Proposed Outer Continental Shelf

Oil & Gas Leasing Program (Mar. 9, 2018),

TE 23

Proclamation No. 2667, 59 Stat. 884 (Sept. 28,

CREAR Ban a Se eae 3, 11

Proclamation No. 5030, 97 Stat. 1557 (Mar. 10,

SER EAIR case oe Rea TPE ce ee Caeser EAT ee 3

Ron Lieber, Life on Board a Gulf of Mexico Oil

Drilling Platform, FAST COMPANY (Sept. 30,

2000), https://bit.ly/2BwWaYN .....................000000. 25

Stephen Lee & Dean Scott, Coastal States Link

Arms to Oppose Trump Offshore Drilling

Plan, BLOOMBERG ENVIRONMENT (Jan. 8,

2019), https://bit.ly/2BruB3c.............................0004- 23

U.S. Dep’t of the Interior and Bureau of Ocean

Energy Mgmt., 2019-2024 National Outer

Continental Shelf Oil and Gas Leasing Draft

Proposed Program (Jan. 2018),

EE passim

U.S. Dep’t of the Interior, Natural Resources

Revenue Data: Gulf of Mexico,

ESTE SE ar Ne SOU 33

Other Authorities—Continued: Page(s)

Warren M. Christopher, The Outer Continental

Shelf Lands Act: Key to a New Frontier, 6

RE en passim

INTEREST OF AMICI CURIAE'!

Amici curiae are companies with oil and gas opera-

tions on the Outer Continental Shelf (“OCS”) or in the

offshore industry, and trade associations whose mem-

bers operate in, serve, or have other interests in that

industry. Amici curiae Freeport-McMoRan Oil & Gas

LLC, Amplify Energy Corp. (partly through its subsid-

iary Beta Operating Company, LLC), DCOR, LLC, and

Ensign United States Drilling (California), Inc., are

companies engaged in the acquisition, exploration, de-

velopment, and production of oil and gas properties on

the OCS, and which employ individuals to work on off-

shore OCS platforms off the California coast and in the

Gulf of Mexico. Several amici are defendants in pend-

ing litigation in which OCS platform workers assert

wage-and-hour claims under California law. Because

those cases will likely be affected by the disposition of

this case, those amici have a direct and substantial in-

terest in this case.

Amici the American Petroleum Institute, California

Independent Petroleum Association, Independent Pe-

troleum Association of America, National Association

of Manufacturers, National Ocean Industries Associa-

tion, Offshore Operators Committee, and Western

States Petroleum Association are trade associations

representing business interests involved or supporting

the offshore industry, including crude oil and natural

! No counsel for a party authored this brief in whole or in part,

and no person or entity other than the amici curiae or their coun-

sel made a monetary contribution intended to fund the prepara-

tion of this brief. The parties were given timely notice and have

consented to this filing.

(1)

gas producers and oil and natural gas exploration and

production companies with operations on the OCS.

Collectively, amici participate regularly in legisla-

tive, regulatory, and judicial proceedings that may af-

fect their or their members’ interests. Amici have an

interest in ensuring a stable and predictable legal

framework governing the offshore industry, to allow

businesses and employees to know which labor and

employment practices (among other laws) apply to

U.S. offshore operations. All amici have a strong and

direct interest in the question presented here—1.e., the

circumstances in which state wage-and-hour laws

might apply to operations on the OCS.

INTRODUCTION AND

SUMMARY OF ARGUMENT

Oil and gas operations on the OCS play an essential

role in the Nation’s economy, generating billions of dol-

lars a year for the United States Treasury and employ-

ing hundreds of thousands of Americans.? OCS oper-

ations are also vital to the Nation’s energy and na-

tional security needs.

More than 70 years ago, this Court recognized that

the OCS and its natural resources are “of vital conse-

quence to the nation in its desire to engage in com-

merce and to live in peace with the world.” United

2 In addition to generating billions of dollars a year in revenue,

the federal government recently estimated that offshore oil and

gas operations created approximately 315,000 jobs. U.S. Dep't of

the Interior and Bureau of Ocean Energy Mgmt., 2019-2024 Na-

tional Outer Continental Shelf Oil and Gas Leasing Draft Pro-

posed Program 1-9, 8-4 (Jan. 2018), https://bit.ly/21U8cCV.

States v. California, 332 U.S. 19, 35 (1947). Congress

similarly has recognized that offshore oil and gas op-

erations are essential to the Nation’s “economic and

energy policy goals” and “national security.” See 43

U.S.C. §§1332, 1801, 1802. The Executive Branch has

long asserted a national interest in the OCS. See, e.g.,

Exec. Order 13795, 82 Fed. Reg. 20,815 (Apr. 28,

2017); Proclamation No. 5030, 97 Stat. 1557 (Mar. 10,

1983); Proclamation No. 2667, 59 Stat. 884 (Sept. 28,

1945). Illustrating the significance of the OCS, some

commentators have suggested that Congress’s asser-

tion of authority over the OCS in 1953 was “more im-

portant to the nation than the Louisiana Purchase.”

Warren M. Christopher, The Outer Continental Shelf

Lands Act: Key to a New Frontier, 6 STAN. L. REV. 23,

23 (1953).

Employers and employees in this large and vital

sector of the economy rely upon predictable and easily

implemented legal rules to govern their relationships.

The federal government likewise benefits from a

well-defined legal regime on the OCS, which encour-

ages operators to bid on new leases and expand devel-

opment, thus helping to meet the Nation’s energy

needs and bringing in revenue. Congress created such

a framework when it enacted the Outer Continental

Shelf Lands Act (“OCSLA”), 43 U.S.C. §1331 et seq.,

which governs the rights and obligations of those who

own, operate, and work on offshore drilling platforms.

Through OCSLA, Congress extended the jurisdic-

tion of the United States and its laws to the OCS, de-

claring it “an area of exclusive Federal jurisdiction.”

43 U.S.C. §§1332(1), 1333(a). OCSLA is “a sweeping

assertion of federal supremacy” over the OCS. Ten

Taxpayer Citizens Grp. vy. Cape Wind Assocs., LLC, 373

F.3d 183, 188 (1st Cir. 2004). But because “the Federal

Code was never designed to be a complete body of law

in and of itself,” Rodrigue v. Aetna Cas. & Sur. Co., 395

U.S. 352, 358 (1969) (quoting 99 Cong. Rec. 6963

(1953)), OCSLA adopts as surrogate federal law the

“applicable and not inconsistent * * * laws of each ad-

jacent State.” 43 U.S.C. §1333(a). For almost fifty

years, every court to consider the question has inter-

preted that language to mean that state law is adopted

as surrogate federal law under OCSLA only when nec-

essary to “supplement{] gaps in the federal law.” Ro-

drigue, 395 U.S. at 357; see also Cont'l Oil Co. v. Lon-

don S.S. Owners’ Mut. Ins. Ass'n, 417 F.2d 1030, 1035-

1036 (5th Cir. 1969). In concluding otherwise, the

Ninth Circuit rejected decades of well-settled prece-

dent, disrupting the widely held expectations of those

who operate on the OCS and in related sectors.

In interpreting OCSLA to allow state law to apply

on the OCS even in the absence of a “gap” in federal

law, the Ninth Circuit misconstrued the text and

structure of that statute and ignored the context in

which Congress enacted it. Contrary to OCSLA’s text,

history, and purpose, the Ninth Circuit's decision ef-

fectively accords state law supremacy over federal law

in an area under exclusive federal jurisdi_tion. Given

the reality that some States will have different, and

even diametrically opposed, policy preferences than

the federal government regarding OCS activity, this

interpretation invites strategic behavior by coastal

States designed to frustrate federal policy on the OCS.

Further, by rejecting a legal standard that has pro-

vided the choice-of-law framework on the OCS for al-

most 50 years, the Ninth Circuit's decision disrupts

longstanding and mutually beneficial employment re-

lationships carefully tailored to the unique circum.

stances of living and working offshore.

If the decision below is allowed to stand, OCS oper-

ations across the United States will be subject to the

varying, and often conflicting, policy preferences of in-

dividual States, creating a fragmented and unpredict-

able legal framework on the OCS. This Court should

reject the Ninth Circuit's interpretation § of

§1333(a)(2)(A) and reaffirm that federal law is para-

mount on the OCS.

ARGUMENT

When businesses decide whether and how to invest

and operate on the OCS, a key threshold question is

whether federal or state law applies. The Outer Con-

tinental Shelf Lands Act, 43 U.S.C. §1331 et seq., de-

fines the body of law applicable to the OCS and the

structures thereon, including drilling and production

platforms. Rodrigue v. Aetna Cas. & Sur. Co., 395 U.S.

352, 355 (1969). That Congress designed a legal re-

gime in which federal law is “the exclusive law that

govern|s] on the OCS,” Br. for Pet’r 19, and thus “pre-

vail[s}” over state law, Rodrigue, 395 U.S. at 358, is no

surprise.

Before Congress enacted OCSLA, this Court de-

clared in a series of cases that

under our constitutional arrangement|,] par-

amount rights to the lands underlying the

marginal sea are an incident to national sov-

ereignty and * ** their control and disposi-

tion in the first instance are the business of

the Federal Government rather than the

States.

United States vy. Maine, 420 U.S. 515, 522 (1975); see

also United States v. Texas, 339 U.S. 707 (1950);

United States v. Louisiana, 339 U.S. 699 (1950) (“Lou-

isiana I’); United States v. California, 332 U.S. 19

(1947). The paramountcy cases, in short, proclaimed

that the federal government has “exclusive jurisdiction

over the OCS.” Shell Oil Co. v. lowa Dep't of Revenue,

488 U.S. 19, 26 (1988). By enacting OCSLA in 1953,

Congress emphatically embraced that view.

I. Consistent with the Statutory Text and

Purpose, Every Court Except the Ninth

Circuit Has Interpreted OCSLA as Bor-

rowing State Law Only When Necessary to

Fill Substantial Gaps in Federal Law

A principal purpose of OCSLA was “to define a body

of law applicable” to the OCS and the structures fixed

thereon. Rodrigue, 395 U.S. at 355-356. Consistent

with the “constitutional underpinnings” of the para-

mountcy cases, Maine, 420 U.S. at 524, OCSLA ex-

tended the jurisdiction of the United States and its

laws to the OCS. 43 U.S.C. §§1332(1), 1333(a); see also

Pac. Operators Offshore, LLP vy. Valladolid, 565 U.S.

207, 212 (2012); Shell Oil, 488 U.S. at 26-27. “It is ev-

ident,” based on the text and structure of OCSLA, that

“federal law is ‘exclusive’ in its regulation of” the OCS.

Rodrigue, 395 U.S. at 355-357; see also Br. for Pet’r 5-

7, 18-23.

Congress recognized, however, that, “because of its

limited function in a federal system,” federal law

might not address the full range of legal issues poten-

tially arising on the OCS. Rodrigue, 395 U.S. at 357.

As this Court once explained:

[T]he “whole circle of legal problems” typically

resolved under state law could arise on the

OCS, because the large crews working on the

great offshore structures would “die, leave

wills, and pay taxes. They will fight, gamble,

borrow money, and perhaps even kill. They

will bargain over their working conditions

and sometimes they will be injured on the

job.”

Shell Oil, 488 U.S. at 27 n.8 (quoting Warren M. Chris-

topher, The Outer Continental Shelf Lands Act: Key to

a New Frontier, 6 STAN. L. REV. 23, 37 (1953)). Be-

cause “the Federal Code was never designed to be a

complete body of law in and of itself,” Rodrigue, 395

U.S. at 358 (quoting 99 Cong. Rec. 6963 (1953)), Con-

gress included a choice-of-law provision that allows for

the adoption of the “applicable and not inconsistent”

laws of the adjacent States. 43 U.S.C. §1333(a)(2)(A).

This Court first had occasion to _ interpret

§1333(a)(2)(A) in 1969. Based on the statutory text,

structure, and purpose, this Court explained that state

law is incorporated under §1333(a)(2)(A) only when

necessary to “supplement{] gaps in the federal law.”

Rodrigue, 395 U.S. at 357; see also Br. for Pet’r 25-26.

This Court highlighted the supremacy of federal law

on the OCS by explaining that OCSLA implements the

principle that “federal law should prevail” over state

law on the OCS. Rodrigue, 395 U.S. at 358. Since Ro-

drigue, this Court has reaffirmed that the laws of the

adjacent States apply under OCSLA only when neces-

sary “to fill the substantial ‘gaps’ in the coverage of fed-

eral law.”® Gulf Offshore Co. v. Mobil Oil Corp., 453

U.S. 473, 480 (1981); see also, e.g., Maryland vy. Loui-

siana, 451 U.S. 725, 752 n.26 (1981); Chevron Oil Co.

v. Huson, 404 U.S. 97, 103-105 (1971).

Shortly after this Court decided Rodrigue, the Fifth

Circuit addressed whether state law is “applicable and

not inconsistent” under §1333(a)(2)(A) when existing

federal law provides a comprehensive governing

scheme—i.e., when there is no “gap” in federal law.

Applying “the recurring theme of Rodrigue,” the Fifth

Circuit held that “the deliberate choice of federal law,

federally administered, requires that ‘applicable’ be

read in terms of necessity—necessity to fill a signifi-

cant void or gap” in federal law. Cont’ Oil Co. v. Lon-

don S.S. Owners’ Mut. Ins. Ass’n, 417 F.2d 1030, 1036

(5th Cir. 1969). When federal law provides both a right

and a remedy, the Fifth Circuit explained, the applica-

tion of state law is neither “needed [njor permitted.”

Id. at 1035-1036. That principle applies even when

® This Court's interpretation of §1333(a)(2)(A) is consistent

with well-settled principles governing the applicability of state

law in federal enclaves, see Br. for Pet’r 20-21, 34-35, as well as

this Court's interpretation of other statutes allowing for the adop-

tion of state law in federal enclaves. See, ¢.g., Lewis v. United

States, 523 U.S. 155, 160 (1998) (explaining that the Assimilative

Crimes Act “borrow|[s] state law to fill gaps in the federal criminal

law that applies on federal enclaves’).

state law provides more protection than federal law.

See LeSassier v. Chevron USA, Inc., 776 F.2d 506,

508-509 (5th Cir. 1985). And until the Ninth Circuit's

decision in this case, every court to consider the issue

has understood §1333(a)(2)(A) as allowing for the

adoption of state law only when necessary to supple-

ment gaps in the federal law. F.g., Tetra Techs., Inc.

v. Cont'l Ins, Co., 814 F.3d 733, 738 (5th Cir. 2016);

Genina Marine Servs., Inc. vy. Arco Oil & Gas Co., 499

So.2d 257, 259-260 (La. Ct. App. 1986); see also Br. for

Pet’r 27-28.4

Contrary to long-settled precedent and widely held

expectations of employers and employees alike, the

Ninth Circuit held here that workers employed on

OCS platforms may bring claims under state wage-

and-hour laws, Pet. App. 1-2, despite the applicability

of the Fair Labor Standards Act (“FLSA”), 29 U.S.C.

§201 et seq., “a comprehensive legislative scheme,”

United States v. Darby, 312 U.S. 100, 109 (1941). The

Ninth Circuit expressly “reject[ed] the proposition”

that state law applies on the OCS only if “necess[ary]

to fill a significant void or gap” in federal law. Pet.

App. 2 (citing Cont? Oil, 417 F.2d at 1036).

The Ninth Circuit's decision is already having—and

if allowed to stand, will continue to have—far-reaching

practical and financial consequences for OCS employ-

ers and the thousands of employees working offshore

‘ Prior to the panel's decision here, district courte within the

Ninth Circuit had consistently followed Continental Oil. See Pet.

App. 20 n.13.

pursuant to generous contractual and other arrange-

ments predicated on a legal framework the panel dis-

carded.

Il. The Ninth Circuit’s Interpretation Gives

State Law Supremacy Over Federal Law

In An Area Under Exclusive Federal Juris-

diction And Control

The Ninth Circuit's interpretation of §1333(a) effec-

tively “accord[s] state law supremacy over federal law”

and “cede[s] the United States’ jurisdiction over the

OCS to state agencies,” Pet. App. 23, contrary to

OCSLA’s text, purpose, and history. In OCSLA, Con-

gress “emphatically implemented its view’ that “the

OCS [is] subject to the exclusive jurisdiction and con-

trol of the Federal Government.” Shell Oil, 488 U.S.

at 26-27. Embedded in the statute is the principle that

“federal law should prevail” over state law, particu-

larly where, as here, a federal statutory scheme does

apply. Rodrigue, 395 U.S. at 358; accord Nations v.

Morris, 483 F.2d 577, 590 (5th Cir. 1973) (stating that

“It}here is no need to bring aboard” state law on the

OCS “to cause liability to be fixed where Congress

never intended it”).

In the Ninth Circuit’s mistaken view, even when a

comprehensive federal scheme governs claims arising

on the OCS, state law will control so long as it “per-

tain|s] to the subject matter at hand,” Pet. App. 21-27,

and is not “inconsistent with” existing federal law (un-

der the Ninth Circuit’s diluted reading of “incon-

sistent,” see Pet. App. 27-39). The Ninth Circuit’s in-

terpretation cannot be reconciled with OCSLA’s text

and purpose.

A. The OCS Is Subject to the Exclusive

Jurisdiction and Control of the Fed-

eral Government

To understand why Congress chose to make federal

law paramount on the OCS, it is necessary to under-

stand the context in which OCSLA was passed. Begin-

ning in the 1930s, a sharp dispute arose between the

coastal States and the federal government over juris-

diction and ownership of submerged coastal lands and

their natural resources. United States v. Louisiana,

363 U.S. 1, 5, 16-17 (1960); see also Edward A. Fitz-

gerald, The Seaweed Rebellion: Federal-State/Provin-

cial Conflicts over Offshore Energy Development in the

United States, Canada, and Australia, 7 CONN. J. INT'L

L. 255, 257 (1992); Dr. Edward A. Fitzgerald, The Tide-

lands Controversy Revisited, 19 ENVTL. L. 209, 212-214

(1988); Daniel S. Miller, Offshore Federalism: Evolving

Federal-State Relations in Offshore Oil & Gas Devel-

opment, 11 ECOLOGY L. Q. 401, 407 (1984). The impe-

tus for the dispute was the discovery of oil on the sea-

bed, which led various coastal States to lease the land

for exploration. California, 332 U.S. at 25, 38.

The controversy boiled over after World War II,

when President Truman declared that the OCS was

subject to the jurisdiction and control of the United

States. Proclamation No. 2667, 59 Stat. 884 (Sept. 28,

1945); see also Exec. Order 9633, 10 Fed. Reg. 12,305-

01 (Oct. 2, 1945). President Truman’s proclamation

“effectively foreclosed any future state claims to the

[OCS],” Miller, Offshore Federalism, 11 ECOLOGY L. Q.

at 407, and thus defined “the controversy as a strictly

domestic conflict between the federal and coastal state

governments,” Fitzgerald, The Tidelands Controversy,

19 ENVTL. L. at 214. Faced with an uncooperative Con-

gress, “the Truman administration resorted to litiga-

tion.” Ibid.

This Court settled the debate in 1947, holding that

the federal government, and not the States, had “par-

amount rights in and power over” submerged coastal

lands, including submerged lands within the three-

mile belt and the OCS.° See California, 332 U.S. at

33-34, 38-39; see also Maine, 420 U.S. at 519-520. Be-

cause of the significant matters of national concern in-

volved—i.e., commerce, national security, and interna-

tional law—this Court rejected the idea that the “local

interests” supporting a State’s control over inland wa-

ters extended to submerged coastal lands.® California,

332 U.S. at 34-36. Three years later, this Court reaf-

firmed that submerged coastal lands are

a national, not a state concern. National in-

terests, national responsibilities, national

® The coastal States never seriously contested the federal gov-

ernment 's exclusive jurisdiction over the OCS—.e., the lands and

natural resources lying beyond the three-mile belt. See Br. for

Pet'r at 5; see also Maine, 420 U.S. at 519, 524-526.

® Changes in federal policy concerning offshore oil and gas ex-

ploration and production have often coincided with issues of in-

ternational significance. See Fitzgerald, The Seaweed Rebellion,

7 CONN. J. INT'L L. at 257, 262-263 (discussing increased offshore

activity in response to World War II and the 1973 oil embargo).

concerns are involved. The problems of com-

merce, national defense, relations with other

powers, war and peace focus there. National

rights must therefore be paramount in that

area.

Louisiana I, 339 U.S. at 704; see alsc Texas, 339 U.S.

at 719-720. These cases established that, as a matter

of constitutional structure, “paramount rights” to the

OCS are “an incident to national sovereignty,” mean-

ing that the control of the OCS is “in the first instance

*** the business of the Federal Government rather

than the States.” Maine, 420 U.S. at 522; accord

United States v. Alaska, 521 U.S. 1, 5 (1997) (Owner-

ship of submerged lands * * * is an essential attribute

of sovereignty.” (citation omitted)). In other words, the

paramountcy cases established the federal govern-

ment’s “exclusive jurisdiction over the OCS.” Shell

Oil, 488 U.S. at 26; see also Gulf Offshore, 453 U.S. at

479 n.7 (stating that the paramountcy cases held that

“the Federal Government enjoyed sovereignty and

ownership” of the OCS “to the exclusion of adjacent

States”).

In response to these decisions, Congress passed the

Submerged Lands Act, 43 U.S.C. §1301 et seq., which

ceded “any federal interest in the lands within three

miles of the coast, while confirming the Federal Gov-

ernment’s interest in the area seaward of the 3-mile

limit.” Maryland, 451 U.S. at 730; cf. Alaska, 521 U.S.

at 6 (the Submerged Lands Act “establishes States’ ti-

tle to submerged lands beneath a 3-mile belt of the ter-

ritorial sea, which would otherwise be held by the

United States” (citation omitted)). Shortly thereafter,

Congress enacted OCSLA, which extended the juris-

diction of the United States and its laws to the OCS—

defined as the submerged lands lying seaward of the

three-mile boundary, 43 U.S.C. §§1301(a), 1331(a)}—

and declared it “an area of exclusive Federal jurisdic-

tion.” Id. §§1332(1), 1333(a)(1). Thus, the three-mile

boundary is where “the OCS commences,” Amoco Prod.

Co. v. Vill. of Gambell, 480 U.S. 531, 547 (1987), and

“the states’ jurisdiction ends,” Alabama v. U.S. Dep't

of Interior, 84 F.3d 410, 412 (11th Cir. 1996). Im-

portantly, both pieces of legislation “embraced rather

than repudiated” the principle that “paramount rights

to the offshore seabed inhere in the Federal Govern-

ment as an incident of national sovereignty.” See

Maine, 420 U.S. at 524-527. Neither statute “call(s]

into question” the federal government's “paramount

sovereign authority over submerged lands beneath the

territorial sea.” Alaska, 521 U.S. at 35; see also Shell

Oil, 488 U.S. at 27.

The fact that Congress endorsed and implemented

through OCSLA the constitutional principles of the

paramountcy cases is crucial context informing any in-

terpretation of the statute. See Abramski v. United

States, 573 U.S. 169, 179 (2014); Dolan v. U.S. Postal

Serv., 546 U.S. 481, 486 (2006). This Court has coun-

seled against reading the text of a statute in a manner

that would “dramatically separate the statute from its

intended purpose.” Lewis v. United States, 523 U.S.

155, 160 (1998). To that end, OCSLA must be under-

stood in the context of this Court’s decisions resolving

“the clash between national sovereignty and states’

rights” on the OCS. Cont’ Oil, 417 F.2d at 1036. In-

deed, this Court has consistently and repeatedly inter-

preted OCSLA in light of this historical background.

See, e.g., Shell Oil, 488 U.S. at 26-27; Gulf Offshore,

453 U.S. at 479 n.7. This background demonstrates

that Congress’s choice in OCSLA “to retain exclusive

federal control of the administration of the [OCS],”

Gulf Offshore, 453 U.S. at 479 n.7, “affirm[ed] the Fed-

eral Government's authority and control over the

[OCS],” Pac. Operators, 565 U.S. at 212. And because

“the OCS [is] subject to the exclusive jurisdiction and

control of the Federal Government,” Shell Oil, 488

U.S. at 27, “federal law should prevail” over state law,

Rodrigue, 395 U.S. at 358.

B. Congress Deliberately Rejected the

Notion that State Law Could Dis-

place Federal Law on the OCS

The historical context also demonstrates that Con-

gress consciously adopted a legal framework that en-

sured that federal law had an overriding and control-

ling claim over legal disputes arising on the OCS.

After this Court determined that “the OCS was sub-

ject to the exclusive jurisdiction and control of the Fed-

eral Government, Congress was faced with the prob-

lem of which civil and criminal laws should govern ac-

tivity on the OCS sites.” Shell Oil, 488 U.S. at 27. This

issue was “the most challenging question of legal the-

ory” Congress faced in drafting OCSLA.’ Christopher,

7 The choice-of-law issue had “political ramifications” because

“the law to be applied had a bearing on the question whether the

supra, at 37. “In choosing a body of law to govern leas-

ing and other activities on the [OCS], Congress ulti-

mately settled on a combined federal-state regime.”

United Ass’n of Journeymen v. Barr, 981 F.2d 1269,

1270 (D.C. Cir. 1992) (citing Christopher, supra, at

37-43). Congress made applicable “the whole body of

Federal law” to the OCS “as well as state law where

necessary.” Rodrigue, 395 U.S. at 357, 362; see also 43

U.S.C. §1333(a).

Before settling on this “unique combination of fed-

eral and state laws,” Christopher, supra, at 41, Con-

gress rejected a blanket application of either maritime

law or state law to the OCS. See Rodrigue, 395 U.S.

at 355, 358-359, 361-366. One reason Congress found

“the contemplated extension of admiralty law to the

OCS * * * unsatisfactory” was the concern that “[t]he

so-called social laws necessary for protection of the

workers and their families would not apply.” Pet. App.

23 (quoting 99 Cong. Rec. 6963). But the Senate’s con-

cern with the inapplicability of these laws on the OCS

did not, as the Ninth Circuit claimed, “emphasize[] the

importance of having state law apply to the OCS

*** ” Pet. App. 24. Instead, Congress alleviated the

problem by incorporating “the whole body of Federal

law” to the OCS, which included the FLSA. Rodrigue,

395 U.S. at 362; cf. Cont Oil, 417 F.2d at 1035 (reject-

ing a reading of §1333(a)(2)(A) that would “impute[] to

Congress the purpose generally to export the whole

body of adjacent [state] law onto the [OCS]”).

coastal states were to share in the revenues of the outer Conti-

nental Shelf.” Christopher, supra, at 37, 40-41; see also Shell Oil,

488 U.S. at 27-28.

To be sure, Congress was aware of “the special rela-

tionship between the men working on these artificial

islands and the adjacent shore to which they commute

to visit their families * * * .” See Rodrigue, 395 U.S. at

355, 363, 365. Seizing on this issue, opponents of

OCSLA, led by Louisiana Senator Russell Long, had

argued in favor of applying state law on the OCS, en-

forced by “the officials of such State.” Jd. at 358-359.

The Department of Justice, on the other hand, opposed

a regime that would place the OCS under “the juris-

diction of state courts, state substantive law, and state

law enforcement.” Jd. at 364-365. Congress ultimately

agreed with the Administration’s view, and rejected

“the notion of supremacy of state law administered by

state agencies.” Cont Oil, 417 F.2d at 1036 (citing

Rodrigue, 395 U.S. at 358); see also 43 U.S.C. §1333(a).

In doing so, Congress did not ignore the close ties be-

tween the workers and the coastal States. Congress’s

recognition of those ties “manifested itself primarily in

the incorporation of the law of adjacent States to fill

gaps in federal law.” Gulf Offshore, 453 U.S. at 479

n.7 (citing Rodrigue, 395 U.S. at 365).

Despite the fact that Congress declined to adopt an

approach that would result in state substantive law

displacing federal law on the OCS, see Rodrigue, 395

U.S. at 362; Contl Oil, 417 F.2d at 1036, the Ninth

Circuit's decision accomplishes just that. The text and

structure of OCSLA establish that “federal law is ‘ex-

clusive’ in its regulation” of the OCS, meaning that

state law applies only if federal law does not “first ap-

ply.” See Rodrigue, 395 U.S. at 356-359, 366. Stated

differently, the existence of a comprehensive federal

statutory scheme governing the dispute is the primary

“obstacle to the application of state law by incorpora-

tion as federal law” through OCSLA. /d. at 366; accord

Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207,

217-218 (1986) (explaining that in Rodrigue, federal

law did not apply, and thus did not “preclude the ap-

plication of state law as adopted federal law through

OCSLA”).

When existing federal law provides a comprehen-

sive governing scheme, “there is no gap—not even a

tiny one”—for state law to fill. Nations, 483 F.2d at

589. In that situation, “[t]here is no need to bring

aboard” state law “to cause liability to be fixed where

Congress never intended it.” /d. at 590; compare Hu-

son, 404 U.S. at 101, 103-105 (applying state law

where federal law provided “no particular statute of

limitations”), and Rodrigue, 395 U.S. at 359-360, 366

(applying state law because of the “inapplicability” of

federal law), with LeSassier, 776 F.2d at 509 (refusing

to adopt state law “where Congress provided a specific

statutory provision” that addressed the dispute), and

Nations, 483 F.2d at 589-590 (refusing “to impose out-

side state oriented obligations” where a federal statute

provided “a complete body of law”). The fact that state

law “duplicate[s] or supplement|s]” federal law, and

thus provides “superior awards,” does not create a

“gap” justifying the adoption of state law. See Le-

Sassier, 776 F.2d at 508-509.

By allowing state law to supersede federal law on

the OCS so long as it “pertain|s] to the subject matter

at hand,” Pet. App. 21, and “embraces a more protec-

tive standard” than federal law, Pet. App. 39, the

Ninth Circuit's interpretation inverts the analysis and

frustrates Congressional intent. The application of

state law on the OCS is “subject to the absence of ‘in-

consistent’ and applicable federal law,” Huson, 404

U.S. at 103, and not the other way around. As the

Fifth Circuit explained when it rejected the same ar-

gument almost 50 years ago, the Ninth Circuit's read-

ing of §1333(a)(2)(A) “accords initially a superiority to

adjacent state law” because “the question of federal

law comes into play only after this process excludes

state law.” Cont'l Oil, 417 F.2d at 1035-1036. This

interpretation effectively reads the word “applicable”

out of the statute, “put[ting] almost 100% Emphasis on

the not inconsistent with federal laws element of

[§1333(a)(2)(A)],” id. at 1035 (internal quotation

marks and alterations omitted), an approach this

Court has long disfavored. Cf. Nat? Ass’n of Mfrs. v.

Dep't of Defense, 138 S. Ct. 617, 632 (2018) (“[T]he

Court is obliged to give effect, if possible, to every word

Congress used.” (citation and internal quotation

marks omitted)).

The Ninth Circuit's interpretation is also at odds

with the operation of other statutes that use state law

to fill gaps in federal law. Take, for example, the As-

similative Crimes Act (“ACA”), on which the panel

here relied. Pet. App. 28. As in OCSLA, Congress de-

cided in the ACA to “borrow from preexisting state

law,” rather than “try[] to write an exhaustive criminal

code for federal enclaves.” United States v. Christie,

717 F.3d 1156, 1170 (10th Cir. 2013) (Gorsuch, J.).

Much like OCSLA, the ACA “borrow|s] state law to fill

gaps in the federal criminal law that applies on federal

enclaves.” Lewis, 523 U.S. at 160. But it does so only

to the extent that a defendant’s acts or omissions are

“not made punishable by any enactment of Congress.”

18 U.S.C. §13(a).

In Lewis v. United States, this Court rejected the ar-

gument—similar to the Ninth Circuit’s reading of

OCSLA here—that the ACA assimilates state law

whenever that law does not “make criminal the same

‘precise acts” as those made criminal by federal law.

See 523 U.S. at 162-163. Such a reading of the statute,

this Court explained, would allow for the adoption of

state law “even where there is no gap to fill,” and nei-

ther the ACA’s language nor its purpose warranted an

interpretation that would “significantly broaden{[}” the

reach of state law into federal enclaves. Jd. at 163-164.

This Court concluded that it was “fairly obvious” that

the ACA did not assimilate state law “where both state

and federal statutes seek to punish approximately the

same wrongful behavior|.]” /d. at 165.

The same principles apply to OCSLA’s choice-of-law

provision. When a comprehensive federal statutory

scheme applies on the OCS—such as the FLSA—the

application of state law is neither “needed [njor per-

mitted.” Cont’ Oil, 417 F.2d at 1035-1036; see also

LeSassier, 776 F.2d at 509; Nations, 483 F.2d at 590.

A litigant (or a court) cannot create a gap simply by

showing that state law is more protective than federal

law. See LeSassier, 776 F.2d at 508-509 cf. United

States v. Antelope, 430 U.S. 641, 670 n.13 (1977) (re-

jecting the argument that state criminal law may ap-

ply in federal enclaves to the extent the law is “more

lenient than federal law” (internal quotation marks

omitted)). By reading §1333(a) to allow for the incor-

poration of state law “to fill nonexistent gaps,” Lewis,

523 U.S. at 163, the Ninth Circuit impermissibly ex-

panded the reach of state law on the OCS.

C, The Ninth Circuit's Interpretation

Encourages Strategic Behavior by

the States to Frustrate Federal Pol-

icy

The practical consequences are real. The Ninth Cir-

cuit’s interpretation gives California law supremacy

over a federal regulation explicitly providing that em-

ployees who reside on their employers’ premises “for

extended periods of time” need not be paid for time

spent sleeping or otherwise off duty. See Pet. App.

38-39; 29 C.F.R. §785.23; see also Brigham v. Eugene

Water & Elec. Bd., 357 F.3d 931, 940-941 (9th Cir.

2004); Halferty v. Pulse Drug Co., 864 F.2d 1185, 1190-

1191 (5th Cir. 1989). In effectively overruling federal

law, the panel’s reading invites workers (and creative

plaintiffs lawyers) to retroactively claim a host of ex-

tra-contractual rights based in state employment or

other laws following changes in state substantive law.

If allowed to stand, the decision will trigger new waves

of litigation—and the threat of ever-mounting retroac-

tive liability—every time a State changes its interpre-

tation of its wage, hour, and other employment laws.

The federal-state conflict is stark, where (as here) a

federal scheme allows excluding non-working hours

from overtime, but state law compels the opposite ap-

proach. The Ninth Circuit's decision departs from

cases holding that California state wage-and-hour

laws could not apply in other federal enclaves. £.g.,

Mersnick v. USProtect Corp., No. 06-cv-3993, 2006 WL

3734396, at *6-8 (N.D. Cal. Dec. 18, 2006) (holding

that California wage-and-hour laws did not apply on

Air Force base because in federal enclaves, “state reg-

ulation is barred without ‘specific congressional action’

(quoting Paul v. United States, 371 U.S. 245, 263

(1963))); see also Holliday v. MVM, Inc., No. 08-cv-

7924, 2010 WL 11519452, at *3-5 (C.D. Cal. June 1,

2010) (holding that California’s meal and rest break

laws were not “applicable” in federal enclave); cf. Ro-

drigue, 395 U.S. at 355 (fixtures on OCS treated as

“federal enclaves’).

In practice, some States have—and likely will al-

ways have—different policy preferences than the fed-

eral government regarding OCS activity. By interpret-

ing §1333(a) in a manner that effectively gives state

law supremacy over federal law, the Ninth Circuit's in-

terpretation opens the door to strategic behavior, in-

viting States to promulgate facially neutral but effec-

tively targeted laws that increase the difficulty and

cost of OCS operations.

The concern is not theoretical. In OCSLA, Congress

recognized the public interest in the “expeditious and

orderly development” of the OCS—“a vital national re-

source.” 43 U.S.C. §1332(3); see also id. §§1801-1802.

Relying on that congressional policy, the administra-

tion has adopted a policy to expand activities on the

OCS. See U.S. Dep’t of the Interior and Bureau of

Ocean Energy Mgmt., 2019-2024 National Outer Con-

tinental Shelf Oil and Gas Leasing Draft Proposed Pro-

gram (Jan. 2018) (“Draft Proposed Program”),

https://bit.ly/21U8cCV; see also Exec. Order 13795, 82

Fed. Reg. 20,815 (Apr. 28, 2017). While some coastal

States have expressed support for the plan,* others

have taken steps “aimed at blocking oil and gas drill-

ing off their coasts” through state legislation. Stephen

Lee & Dean Scott, Coastal States Link Arms to Oppose

Trump Offshore Drilling Plan, BLOOMBERG ENVIRON.

MENT (Jan. 8, 2019), https://bit.ly/2BruB3c; see also,

e.g., Jessica Resnick-Ault, U.S. States Slow Trump

Offshore Oil Drilling Expansion Plan, REUTERS (Mar

12, 2018), https://reut.rs/2ppz5R2 (noting that “Cali-

fornia and other states have said they would deny

needed permits for onshore services and transport”).

In short, the Ninth Circuit's interpretation trans-

forms a statute “intended to provide for the orderly de-

velopment of offshore resources,” Shell Oil, 488 U.S. at

27 (citation and internal quotation marks omitted),

into a regime of jurisdictional chaos, inviting States to

assert ever-increasing authority over commercial ac-

tivities in an area Congress reserved for primary fed-

eral jurisdiction and control.

Ill. The Ninth Circuit’s Interpretation Dis-

rupts Employment Relationships Formed

In Reliance On Settled Law

For decades, employers and employees on OCS drill-

ing and production platforms have implemented com-

* See, e.g., Outer Continental Shelf Governors Coalition, RE:

Request for Comments on the 2019 — 2024 Draft Proposed Outer

Continental Shelf Oil & Gas Leasing Program (Mar. 9, 2018),

https://bit.ly/2GBemf9 (statement from the Governors of Ala-

bama, Alaska, Louisiana, Maine, Mississippi, and Texas noting

general support for the Draft Proposed Program).

pensation and benefit structures under a shared un-

derstanding of substantive background law. Whether

by arms-length negotiated contracts, collective bar-

gaining, or other arrangements, these policies have

been tiilored to the offshore industry, recognizing

(among other things) that workers often temporarily

reside on premises. The terms of these arrangements

generally are far more favorable—including with re-

spect to wages, overtime, and other benefits—than

those seen in non-OCS industries typically covered by

state wage-and-hour laws. By rejecting the legal prin-

ciples on which these relationships were based, and

potentially exposing employers to massive retroactive

liability for reasonably relying on longstanding law,

the Ninth Circuit undermined the stability of those re-

lationships, with tremendous practical and financial

consequences.

Oil and gas operations on the OCS present unique

opportunities and challenges. Production platforms

affixed to the OCS operate 24 hours a day and are of-

ten in remote locations miles from the coast. While

some employees may have the option to return home

each night, in other instances, it may be impractical or

undesirable to commute. For example, employees may

prefer not to commute given travel time and logistics.

Others may not reside near enough to allow commut-

ing, for instance choosing to live in a less expensive in-

land area rather than in a California coastal city such

as Santa Barbara. As a result, employees often work

agreed-upon shifts, or “hitches,” in which the employ-

ees work, eat, sleep, and live on the platforms for a

specified number of days—typically followed by an

equal number of days off. See Pet. App. 3 (14-day

shifts on the platform with employees scheduled to

work 12 hours during a 24-hour period, followed by 14

days at home); see also Ron Lieber, Life on Board a

Gulf of Mexico Oil Drilling Platform, Fast COMPANY

(Sept. 30, 2000), https://bit.ly/2BwWaYN.

In recognition of the particular circumstances of

work on OCS drilling platforms, employees receive and

enjoy above-market salaries, generous benefits, and

abundant time off. Long before the decision at issue

here, OCS employees received hourly rates “well above

the state and federal minimum wage” and “premium

rates for overtime hours.” Pet. App. 20. The federal

government recently estimated that offshore oil and

gas workers earn more than 150% of the average

hourly wage of other employees,’ and a study examin-

ing the economic impacts of energy activity in Louisi-

ana estimated that the average wage earned by em-

ployees in the oil and gas extraction area was 180% of

the overall average. '°

® Draft Proposed Program at 8-4, https://bit.ly/2I1U8cCV; see

also Jim Nicholson, The Incredible Economic Opportunities of Off-

shore Energy Exploration, NATL REVIEW (Ort. 1, 2018),

https://bit.ly/2tfOJkk (stating that “natural gas end oil explora-

tion jobs offer average salaries of $116,000 a year, without neces-

sarily requiring a college degree”). Offshore production also “in-

creases the economic contribution to local economies” through on-

shore jobs, spending and investment, and tax revenue. Draft Pro-

posed Program at 8-5, https://bit.ly/21U8cCV.

on the Impact of Energy Activity on the State’s Economy 46,

GREATER NEW ORLEANS, INC. (2014), https://bit.ly/2WSHPiA.

Moreover, during the non-working (e.g., sleeping

and recreation) hours within a hitch that form the ba-

sis for this lawsuit, employees can use their time as

they see fit. The platforms are equipped with various

amenities for employees to use free of charge, includ-

ing cable television, internet access, and fitness and

recreation facilities, allowing employees to engage

cost-free in many of the same personal and leisure ac-

tivities they enjoy on land. Employees live and eat

rent-free during shifts, with employers providing lodg.

ing and bathing facilities, meals, and cleaning services

at no cost to employees. And when the hitch is over,

the employee returns home to spend an equivalent

number of days off.

Employers and employees in the offshore industry

have crafted these mutually beneficial wage-and-ben-

efit policies based on a shared understanding of the

governing legal framework and the industry’s practi-

cal and financial realities. By altering the background

legal framework, the Ninth Circuit's decision is all but

certain to significantly disrupt those relationships.

Overnight, employers in the Ninth Circuit became

subject to state wage-and-hour laws designed for con-

ventional (e.g., 9-to-5) employment but ill-tailored to

the OCS’s unique working environment.

Before the Ninth Circuit’s decision, interested par-

ties understood that, although they may apply to

workers employed in California’s “offshore” areas, Cal-

ifornia’s wage-and-hour laws did not extend to federal

“offshore” areas. As explained above, the paramountcy

cases conclusively established, as a matter of “national

sovereignty,” the federal government's exclusive juris-

diction and control over the entirety of the OCS. See

Maine, 420 U.S. at 519-524. Consistent with this

framework, owners and operators of offshore oil and

gas platforms have long recognized the distinction be-

tween federal “offshore” areas and California “off-

shore” areas. Cf. Sec’y of the Interior v. California, 464

U.S. 312, 315-316 (1984) (the area extending “three ge-

ographical miles seaward from the coastline * * * be-

longs to the states, while the OCS belongs to the fed-

eral government”); Alabama, 84 F.3d at 412 (the OCS

“begin|s] where the states’ jurisdiction ends, i.e., more

than three miles from the coast”).

In 1999, for example, the California Industrial Wel-

fare Commission (“IWC”) held public hearings con-

cerning Assembly Bill 60, known as the “Eight-Hour

Day Restoration and Workplace Flexibility Act of

1999.” See Cal. Lab. Code §500 et seq. The record of

those hearings demonstrates that employers recog-

nized the crucial distinction between “offshore” pro-

duction taking place “within the state water, meaning

within the three-mile limit of the coastline” (which

would be subject to plenary state regulation) and off-

shore activity “on the outer continental shelf or federal

waters” (which would not).'' Cal. Indus. Welfare

Comm'n, Public Meeting Tr. at 129:8-11 (Dec. 15,

'! [WC commissioners likewise limited their comments to

“workers in the state of California.” Cal. Indus. Welfare Comm'n,

Public Meeting Tr. at 19:17 (Nov. 15, 1999),

https://bit.ly/2TREula (emphasis added); see also Cal. Indus.

Welfare Comm'n, Public Meeting Tr. at 135: 18-19 (Dec. 15, 1999),

https://bit.ly/2BBKMei (stating that the bill covered “all workers

* * * in California’).

1999), https://bit.ly/2BBKMei. The California Su-

preme Court itself has expressed uncertainty regard-

ing the reach of California employment law to offshore

activity outside the State’s territorial boundaries. See

Tidewater Marine Western, Inc. v. Bradshaw, 927 P.2d

296, 308-309 (1996). '*

Further, the vast majority of America’s coastal wa-

ters currently open to offshore oil and gas production

activity are located off the coasts of States within the

territorial jurisdiction of the Fifth Circuit. As a re-

sult, OCSLA litigation occurs primarily in that circuit.

See 43 U.S.C. §1349(b) (suits arising out of oil and gas

operations on the OCS may be instituted “in the judi-

cial district of the State nearest the place the cause of

action arose”). And since 1969, the Fifth Circuit con-

sistently has interpreted §1333(a)(2)(A) as adopting

state law on the OCS “only when needed ‘to fill a sig-

nificant void or gap’ in federal law.” Br. for Pet’r 27-28

(quoting Cont? Oil, 417 F.2d at 1036); see also, e.g.,

Tetra Techs., 814 F.3d at 738. Thus, because of the

practical realities of OCS oil and gas operations and

OCSLA litigation, the Ninth Circuit’s decision upsets

longstanding expectations on the OCS.'4

'2 Notably, the court in Tidewater did not analyze, or even men-

tion, OCSLA. See 927 P.2d at 300-302, 308-309.

% See Draft Proposed Program at 4-1, 4-7,

https://bit.ly/21U8ceCV; Bureau of Ocean Energy Mgmt., Gulf of

Mexico OCS Region, https://www.boem.gov/Gulf-of-Mexico- Re-

gion/.

'4 Numerous district courts in the Ninth Circuit have followed

the Continental Oil decision. See, e.g., Williams v. Brinderson

Constructors, Inc., No. 15-cv-2474, 2015 WL 474789, at *4 (C.D.

Cal. Aug. 11, 2015); see also Pet. App. 20 n.13. In addition, the

The disruptive effects of the Ninth Circuit's decision

are numerous. The Ninth Circuit's interpretation

would subject companies and their employees to incon-

sistent substantive obligations depending on where

operations are located, undermining expectations and

disrupting contractual and other arrangements.'® By

allowing state law to oust existing federal law on the

OCS, the Ninth Circuit’s decision exacerbates the

practical problem that “federal officials will be re-

quired to administer the unfamiliar, complicated, and

varying provisions of state law.” Christopher, supra,

at 42.

Even within the Ninth Circuit, OCS operations now

face different legal rules, depending on their location.

Four States within the Ninth Circuit’s jurisdiction—

federal government has understood Continental Oil to be the gov-

erning standard on the OCS. E.g., Br. for Appellee, Mesa Operat-

ing Ltd. P’ship v. U.S. Dep't of the Interior, No. 89-04775, 1990

WL 10084692, at *33-34 (5th Cir. Mar. 13, 1990) (“Local laws thus

are incorporated only to fill the substantial gaps in the coverage

of federal law[.]" (citation, internal quotation marks, and altera-

tions omitted)).

cumstances, an interest in “national uniformity’ would give way

to other considerations. Pet. App. 38 (quoting Gulf Offshore, 453

U.S. at 487; Huson, 404 U.S. at 104); Christopher, supra, at 40-41.

But Congress assured a minimum degree of uniformity by “incor-

porati[ng] * * * the law of adjacent States to fill gaps in federal

law.” See Gulf Offshore, 453 U.S. at 479 n.7, 486-488 (emphasis

added).

California, Oregon, Washington, and Alaska—are ad-

ferences exist in their laws, including about compen-

sation for employees who reside on an employer's

premises for extended periods of time. Compare Men-

diola v. CPS Sec. Solutions, Inc., 340 P.3d 355, 361-366

(Cal. 2015) (on-call hours, including “sleep time,” rep-

resent “hours worked” for overtime purposes), with Air

Logistics of Alaska, Inc. vy. Throop, 181 P.3d 1084,

1092-1094 (Alaska 2008) (sleep and recreation time

need not be compensated as overtime work); see also

Or. Admin. R. 839-020-0042(3) (‘An employee who re-

sides on the employer's premises * * * for extended pe-

riods of time is not considered as working all the time

the employee is on the premises.”).!7

If the panel decision stands, offshore employers will

be faced with changing not only base pay and overtime

arrangements, but also a range of other employment

terms, such as benefit packages. Some benefits pro-

vided to offshore workers—such as life insurance poli-

cies provided by third-party financial institutions—

are tied to a worker’s base pay. Thus, reducing base

pay to offset the additional cost of paying for sleep time

16 See Bureau of Ocean Energy Mgmt., Pacific OCS Region,

https://www.boem.gov/Pacific-Region/; Bureau of Ocean Energy

Mgmt., Alaska OCS Region, https://www.boem.gov/Alaska-Re-

gion/.

17 Other States that are adjacent to offshore OCS oil and gas

activity have applied federal law to determine hours worked for

employees who reside on their employer's premises. See, e¢.g.,

Brown v. Allen Parish Police Jury, 526 So.2d 1190, 1192-1193 (La.

Ct. App. 1988); Perry v. George P. Livermore, Inc., 165 S.W 2d

782, 784-785 (Tex. Civ. App. 1942).

would have cascading collateral consequences, often to

the employee’s detriment. The decision’s ripple effects

stretch beyond employees of platform operators; con-

tractors providing food service, cleaning, and other

services on platforms now face uncertainty about pay-

ing their own employees.

Moreover, if applied retroactively,'® the Ninth Cir-

cuit’s decision could inflict hundreds of millions of dol-

lars of liability on employers who structured opera-

tions in reliance on cases like Rodrigue and Continen-

tal Oil. Such a result would give employees—already

generously compensated under existing arrange-

ments—a windfall of backpay, plus interest and pen-

alties. Going forward, it is doubtful that employers

could offer such generous compensation and benefit

terms, if relationships are subject to state-law over-

time and other requirements enacted without regard

for the unique circumstances of OCS work. Thus, the

Ninth Circuit’s decision not only creates the potential

for significant retroactive liability, it is already dis-

rupting employer-employee relationships, industry-

wide.

Both sides would benefit from having a uniform

choice-of-law regime governing the OCS. Otherwise,

both employers and employees will face a different le-

gal regime depending on whether they are operating

in the Gulf of Mexico or off the Pacific Coast—and

which neighboring state is closest to that location. In-

18 The Ninth Circuit reserved for the district court to decide ‘n

the first instance “whether [the] holding should be applied retro-

spectively.” Pet. App. 43 (citing Huson, 404 U.S. at 106-107).

deed, because individual employees may move be-

tween the Gulf of Mexico and the Pacific Coast on a

short-term basis, they could be subject to multiple in-

consistent pay structures in a given year or month de-

pending on which State was closest to their platform,

even if all work occurred in an area under exclusively

federal jurisdiction.'® Increasing the cost of OCS oper-

ations could also shorten the economic life of some off-

shore facilities, harming not only employees, but also

the federal government, and ultimately taxpayers.

The possibility of expanded OCS operations under

current U.S. policy will only heighten the need for uni-

formity and consistency in the governing legal frame-

work. OCSLA authorizes the Secretary of the Interior

to offer and administer oil and gas leases on the OCS.

Aera Energy LLC vy. Salazar, 642 F.3d 212, 214 (D.C.

Cir. 2011). Under such leases, private companies pay

“an up-front bonus, annual rentals, and royalties on oil

and natural gas actually produced” during the lease

term. /bid. (citing 43 U.S.C. §1337(a), (b)); see also 30

C.F.R. §560.202 (describing bidding systems). Off-

shore activity generates billions in federal revenue;

royalties from OCS drilling “constitute the country’s

second-largest single source of revenue, exceeded only

'® For instance, Pacific Coast platform operators may hire spe-

cialist teams from the Gulf of Mexico to perform particular tasks,

such as plugging and abandonment of wells, on a short-term or

extended basis. Such workers could be subject to certain provi-

sions of California employment law beginning with their first full

day of work. E.g., Sullivan v. Oracle Corp., 254 P.3d 237 (Cal.

2011).

by the federal income tax.””° Keith Chu, Will Revenue

Sharing Spur More Offshore Dyvilling?, GLOBAL EN.

ERGY INSTITUTE, https://bit.ly/2GBakvd; see also Draft

Proposed Program at 1-9, https://bit.ly/21U8cCV. “The

OCSLA thus vests the federal government with a pro-

prietary interest in the OCS * * * .” EP Operating Ltd.

P’ship v. Placid Oil Co., 26 F.3d 563, 566 (5th Cir.

1994) (citation omitted). Increasing the costs and po-

tential liability of offshore production activity could

deprive the federal government of significant revenue,

not only lowering the government's annual royalties

from existing leases, but also deterring operators from

bidding on new leases and slowing development on the

OCS overall.?!

*” In Fiscal Year 2017, for example, offshore production in the

Gulf of Mexico alone provided the federal government with more

than $3 billion in revenue. U.S. Dep't of the Interior, Natural

Resources Revenue Data; Gulf of Mexico (last visited Feb. 13,

2019), https://bit. ly/2ImnkYq.

*! One recent study estimated that expanding oil and gas activ-

ity in the Eastern Gulf of Mexico alone could increase federal rev-

enues from royalties, bonus bids, and rents by some $41.5 billion.

See Calash LLC, The Economic Impacts of Allowing Access to the

Eastern Gulf of Mexico for Oil and Natural Gas Exploration and

Development at 5 (2018), https://bit.ly/2GAzRom; see also Draft

Proposed Program at 6-15, httpa://bit.ly/21U8¢eCV.

CONCLUSION

For the foregoing reasons, and those in Petitioner's

brief, the Court should reverse the judgment of the

Court of Appeals.

Respectfully submitted.

BALDWIN J. LEE JOHN P. ELWOOD

ALLEN MATKINS LECK KEVIN A. GAYNOR

GAMBLE MALLORY & JEREMY C. MARWELL

NATSIS LLP Counsel of Record

Three Embarcadero Ctr. VINSON & ELKINS LLP

12th Floor 2200 Pennsylvania Ave.,

San Francisco, CA 94111 NW, Suite 500W

(415) 273-7446 Washington, DC 20037

(202) 639-6500

KEVIN W. BROOKS jJmarwell@velaw.com

VINSON & ELKINS LLP

2001 Ross Ave., Ste. 3900

Dallas, TX 75201

(214) 220-7805

Counsel for Amici Curiae

GEORGE W. ABELE Davip C. MCDERMOTT

PAUL HASTINGS LLP DCOR, LLC

515 South Flower St., 290 Maple Court,

25th Floor Suite 290

Los Angeles, CA 90071 Ventura, CA 93003

(213) 683-6131 (805) 535-2073

Counsel for Beta Operat- Counsel for DCOR, LLC

ing Company, LLC and

Amplify Energy Corp.

DAVID J. COOPER

CATHERINE E. BENNETT

VANESSA FRANCO

CHAVEZ

KLEIN, DENATALE, GOLD-

NER, COOPER, ROSENLIEB

& KIMBALL, LLP

4550 California Ave.,

2nd Floor

Bakersfield, CA 93309

(661) 395-1000

Counsel for Ensign

United States Drilling

(California), Inc.

BARRY RUSSELL

INDEPENDENT PETRO.-

LEUM ASSOCIATION OF

AMERICA

1201 15th Street, NW

Suite 300

Washington, DC 20005

(202) 857-4722

Counsel for Independent

Petroleum Association of

America

STACY R. LINDEN

MATTHEW A. HAYNIE

AMERICAN PETROLEUM

INSTITUTE

1220 L St., NW

Washington, DC 20005

(202) 828-8000

Counsel for American

Petroleum Institute

BENJAMIN G. SHATZ

MANATT, PHELPS & PHIL-

Lips, LLP

11355 W. Olympic Blvd.

Los Angeles, CA 90064

(310) 312-4383

Counsel for California In-

dependent Petroleum As-

sociation

EVAN H. ZIMMERMAN

OFFSHORE OPERATORS

COMMITTEE

2400 Veterans Memorial

Blvd., Suite 206

Kenner, LA 70062

(504) 904-7966

Counsel for the Offshore

Operators Committee

OYANGO A. SNELL

WESTERN STATES

PETROLEUM ASSOCIATION

1415 L Street, Suite 900

Sacramento, CA 95814

(916) 325-3115

Counsel for Western

States Petroleum Associ-

ation

FEBRUARY 2019

PETER C. TOLSDORF

MANUFACTURERS’ CEN.

TER FOR LEGAL ACTION

733 10th St., NW

Ste. 700

Washington, DC 20001

(202) 637-3133

Counsel for National

Association of Manufac-

turers

RANDALL LUTHI

NATIONAL OCEAN

INDUSTRIES

ASSOCIATION

1120 G Street, NW

Suite 900

Washington, DC 20005

(202) 347-6900

Counsel for the Na-

tional Ocean Industries

Association

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